NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

While the OFFICE of President remains in highest regard at NewEnergyNews, this administration's position on the climate crisis makes it impossible to regard THIS president with respect. Below is the NewEnergyNews theme song until 2020.

Thursday, June 29, 2017

Coal Must Go

“The coal industry is facing a new crisis…[after] Southern Co finally gave up on its much-vaunted Kemper coal gasification and CCS project, after costs soared from $1.8 billion to more than $7.5 billion, and it realized it wasn’t going to work…[Southern Co will] cease operations immediately on the coal component of the project, and just use the asset as a gas generator. Shareholders already saddled with $3.1 billion of losses face a further $3.4 billion write down if Southern Co can’t convince regulators to pass those costs on to consumers bills…The spectacular failure of the Kemper facility – more than $7.5 billion for a 582MW plant, the most expensive in US history per MW – comes amid a renewed call for new coal generation to be stopped in its tracks, and for existing coal generation to be wound back rapidly…[In the just-published Three years to safeguard our climate, more than 60 scientists and prominent leaders recommend a six-point plan, including no new coal generators post 2020, accelerating wind and solar and other renewables, retiring all coal-fired generators and boosting electric vehicles…” click here for more

“…[Renewable energy] capacity has more than tripled in the past nine years, and wind and solar power are largely responsible. Now businesses want to harness even more wind energy, at a cheaper price—and one of the best ways to lower cost is to build bigger turbines. That’s why an alliance of six institutions led by researchers at the University of Virginia are designing the world’s largest wind turbine at 500 meters tall—almost a third of a mile high, and about 57 meters taller than the Empire State Building…[T]oday’s typical wind farm towers stand around 70 meters tall…[Their power output] ranges between one and five megawatts…[Taller turbines are more cost-effective because] wind blows stronger and more steadily at greater altitudes…[L]onger turbine blades also catch the wind more efficiently, and taller towers enable lengthier blades…[The new design would be] a 50-megawatt system with blades 200 meters long…[It] faces challenges…How do you make 200-meter blades? How do you put them together? How do you erect such a tall tower?...” click here for more

Paint On Solar Gets Better

“…[Researchers say they have] developed a ‘solar paint’ which is capable of absorbing water vapor and then splitting it to produce hydrogen…[The paint contains] a newly developed compound which behaved like silica gel…[but acted as a semi-conductor and was able to catalyze water and split it] into hydrogen and oxygen…[The paint simultaneously offers strong water and solar absorption and uses the solar] energy to split the water…[H]ydrogen can be used in fuel cells to produce power, with water and heat the only by-products…[When the paint is perfected, the researchers hope it can be] a cheap alternative to traditional photovoltaics…” click here for more

The End Of The Gas Station

“…One of the biggest complaints you hear about electric vehicles is that you can't refuel them the same way as a gas car. That's true now and will be true for a while. DC fast charging and Tesla's Superchargers reduce the amount of time it takes to recharge, but the experience is nowhere near as quick as filling your car [at a gas station. But] once you go electric, you're not going to need a corner gas station to charge your future car because you're going to be ‘refueling’ it everywhere…[Home may] be the main source of car charging…[T]he slow trickle of a 120-volt standard outlet will add 48 miles to the battery of the Chevy Bolt over 12 hours…[A $450 to $500 level 2 charger] is quicker…[and breakeven on the cost could come as soon as] the first year of EV ownership…More and more employers are offering charging stations for their staff…[Leading charger makers see] about 80 percent of charging coming from at home or work…[More will happen in] retail parking lots…[Your grandchildren might giggle about stopping at something called a gas station to put] a liquid in a car…” click here for more

The controversy over utility ownership of electric vehicle charging infrastructure could to come to a head in California…The state’s three dominant investor-owned utilities (IOUs) are acting on plans to build networks of EV chargers approved by the California Public Utilities Commission. They vary in the amount of charging stations owned by utilities and by independent charger providers. Advocates for utility ownership say their ability to rate base investments can help ensure charging infrastructure reaches all customers — not just higher-income ones who today own most EVs. But third party providers say that could squeeze them out of the market, and consumer advocates voice concerns about the cost-effectiveness of utility EV investments.

A recently-released proposed decision in the California’s Alternative Fuel Vehicle proceeding (A 15-02-009) focuses squarely on the question of whether utility ownership of charging infrastructure will unfairly impede private providers. “Where we seek to support the development of a now nascent market, our inquiry into the anticompetitive effects of utility ownership must take into account both actual and potential effects,” Administrative Law Judge (ALJ) Darwin E. Farrar wrote. SCE is working on the buildout of Charge Ready, a $22 million, 1,500-site pilot where hosts will own the charging stations. SDG&E just completed the competitive bidding for Power Your Drive, a $45 million, 3,500-site pilot of utility-owned chargers. Farrar approved a $130 million ratepayer-funded expenditure for PG&E ownership of “make-ready” infrastructure for up to 7,500 EV charging stations — essentially extending the distribution system up to the site of the station… click here for more

Editor’s note: This initiative is now before the Illinois Commerce Commission.

Those who got upset when Microsoft Office shifted to a cloud-based subscription service may not like this story. A new resolution passed by a national association for state utility regulators encourages commissions to allow power companies to rate base investments in cloud-based software as a service (SaaS) technologies and earn a regulated rate of return — just as they do with other software platforms. Utilities may prefer the SaaS option because, like Microsoft’s Office, it can offer cost and operational advantages over hosting information in onsite servers, argues the resolution from the National Association of Regulatory Utility Commissioners (NARUC). Cost constraints preventing a move to cloud computing should be removed.

“Utilities best serve customers, society, the environment, and the grid by making software procurement decisions regardless of the delivery method or payment model,” declares NARUC’s “Resolution Encouraging State Utility Commissions to Consider Improving the Regulatory Treatment of Cloud Computing Arrangements.” The resolution “encourages state regulators to consider whether cloud computing and on-premise solutions should receive similar regulatory accounting treatment.” Most state regulatory regimes now define in-house, on-premises software as a capital expense, meaning that like a power plant or transmission line, utilities can earn a regulated rate of return on the investment. But cloud-based SaaS is typically defined as an operating expense that utilities can pass through to ratepayers, but cannot earn them a profit. That gives utilities a financial incentive to take an approach that may be less efficient and reliable… click here for more

Massachusetts lawmakers, weary of fights to protect the existing net energy metering (NEM) and solar renewable energy credit (SREC) incentives, passed Chapter 75 of the Acts of 2016. The bill ordered the “immediate” implementation of a successor tariff. The new policy must support “a stable and equitable solar market at a reasonable cost to ratepayers.” The Massachusetts Department of Energy Resources (DOER) and distributed energy resources (DER) stakeholders developed a way to meet the Act’s dictates by reconciling the competing interests through as-yet untested distributed solar policies.

At least three crucial questions, still unresolved in solar policy debates across the country, could be answered by Massachusetts’ new policies. One is how to calculate a perceived cost shift. Another is how to value solar generation sent to the grid. The third is how to equitably distribute credits for a solar array’s output to offsite subscribers. The DOER’s leading objective for its successor tariff is to maintain “robust growth” for each solar sector, while also moving away from fights over retail rate NEM. The Department also wants to ensure there are adequate incentives to expand access to solar through community shared solar and programs for low-income electricity consumers. Three further objectives of the stakeholder-driven process are to provide incentives for the co-location of solar and energy storage, formulate accepted solar project siting guidelines, and expand ownership of solar by residential and business customers… click here for more

Mark Cooper, January 2016 (Institute for Energy and the Environment, Vermont Law School)

Abstract
Three recent “roadmap” analyses outline routes to a low-carbon economy that model the decarbonization of the electricity sector and the pervasive electrification of the transportation and industrial sectors. Two of these also impose a pollution constraint on electricity resources that rejects the use of nuclear power and fossil fuels with carbon capture and storage. Using independent cost estimates and sequentially “relaxing” the constraints on resource selection, this paper compares the resource costs of the resulting portfolios of assets needed to meet the need for electricity. Reflecting the continuing decline of the cost of renewable resources, the paper supports the claim that the long run costs of the 100% renewable portfolios are not only less than business-as-usual portfolios, but that the “environmental merit order” of asset selection is quite close to the “economic merit order.” Neither fossil fuels with carbon capture and storage nor nuclear power enters the least-cost, low-carbon portfolio. As long as a rigorous least-cost constraint is imposed on decarbonization, the pollution constraint is superfluous. The paper evaluates the Paris Agreement on climate change in light of these findings. The Agreement is described as a progressive, mixed market economic model with a governance structure based on a polycentric, multi-stakeholder approach for management of a common pool resource. The paper argues that this approach reflects the underlying techno-economic conditions and the fact that national governments have authority over local energy policy. It also notes that the political economy of the Agreement is consistent with current academic analysis of policy responses to the challenges of climate change and management of a large, focal core resource system…

In the above analysis, when we indicate that there could be competition at the margin for the final spots in the resource portfolio if either of the environmental constraints are relaxed, that does not mean that the “environmental merit order” would be more costly than a business-asusual approach. Quite the opposite is the case because the cost of the resources that make up the first three-quarters to nine-tenths of the “environmental merit order” are so much lower. In every case, building the resource portfolio with the renewable building blocks – efficiency, wind, solar (overwhelmingly CSP) – would be less costly. The competition at the margin is only about how large the cost savings will be.

The outcome is uncertain because it depends on how much the low-cost resources could expand, if one or both of the constraints is lifted. At one extreme, it can be argued that the environmental and economic “merit orders” are so close and leave such a small amount of competition at the margin that one or more of the lower cost resources will expand to occupy the space left. Cost might go up, but not very much.

At the other extreme, one can argue that there would be no expansion, as shown in Figure V-1. In the Jacobson et al. analysis for the U.S., the marginal resource needed would be nuclear, which would increase the cost savings by 10% because of the extremely low assumed cost of nuclear and the relatively large role of offshore wind. At Vogtle costs, the marginal resource would be coal with carbon capture and the cost savings would be 5%. The result is similar with the higher costs of Hinkley or North Anna. If both the carbon and pollution constraints were relaxed, the marginal resource would be coal and the marginal savings would be about 11%.

In the global analysis, the relaxation of the pollution constraint would lower costs about 5%, again because of the unjustifiably low nuclear cost projected, while eliminating the carbon constraint would lower costs by 10%, because of the smaller role of offshore wind. At the Vogtle cost of nuclear, the marginal resource is coal with carbon capture and storage and the additional savings are even smaller. Thus, relaxing the constraint on other pollutants results in minimal cost savings.

While we will not explore the space between the extremes of assuming that other resources would fill the gap of relaxing the constraints entirely, or not at all in detail, one area between the extremes that is compelling and worthy of comment is the amount of efficiency that is assumed. Given the way efficiency is treated in the larger Jacobson et al. analysis and the fact that only modest gains in end use efficiency are assumed, it seems reasonable to project a larger contribution from efficiency, not only in the analysis of the lifting of constraints, but even in the base renewable case. Combining the business-as-usual and the transformation scenario, the total improvement in end use efficiency is about 20%. The economic potential is larger than that today and the technical potential is much larger. Moreover, the active management of demand in the transformation of the system has a dividend in reduced demand in the range of 10% to 20%.

Therefore, it can be argued that higher end use efficiency savings should be assumed and priced into the overall analysis. Although assuming an additional 10% of efficiency and pricing it into the analysis is conservative, as shown in Figure V-1, it has a large impact on the cost of the portfolio of assets.

Figure V-1 compares estimates for the impact of assuming a relatively modest ten percentage point increase in efficiency from the base case. We find that it not only fills a large part of the gap created by removing the carbon or pollution constraints, it also more than offsets any cost increase associated with the constraint, compared to savings that would result from lifting the constraint. Of course, one can argue that policy could achieve efficiency independently of the constraints, so that the overall price would be even lower, but the difference is extremely small.

Thus, contrary to loud complaints that dealing with climate change will cause a disastrous increase in electricity costs, a rigorous, least-cost approach prevents such an outcome and may even result in a reduction in the total cost of energy services, taking into account the cost of more efficient capital equipment powered by electricity and the very large potential for passive approaches to energy services.

Having reached this conclusion on the basis of the direct cost of the resources, we would be remiss in not mentioning other costs and factors that have economic implications. Jacobson et al. have quantified the large public health and environmental benefits of shifting to low-carbon, low-polluting resources. There have been quantitative and qualitative efforts to assess and rank the resources in terms of their environmental impacts and sustainability.

Figure V-2 combines qualitative and quantitative approaches to demonstrate the nature of these considerations. The upper graph shows two quantitative assessments. The lower graph correlates these with Jacobson et al.’s ranking of environmental impacts. The quantitative and qualitative ranks yield similar results that support a clear set of conclusions:

• The selection of resources on the basis of their environmental and sustainability characteristics would be almost identical to a selection based on their economic cost.

• Renewables have much smaller impacts.

• Nuclear and natural gas are quite close to one another.

Simply put, the environmental and economic “merit orders” fit hand in glove based on these considerations. In fact, the recent Australian cost study included a qualitative assessment of many of the factors considered by Jacobson et al.

One other impact of the transition to a low-carbon economy that deserves special attention is the energy-water nexus. Water is an essential need for human life, a critical input to agriculture and has been an important input for electricity generation. The electricity sector is a huge consumer of water.60 Electricity generating technologies have impacts on water from both the consumption and contamination points of view, which have been recognized in the broader environmental evaluations of resources.61 Climate change and the response to it are also likely to magnify the importance of the energy-water nexus.62 As shown in Figure V-3, the examination of water reinforces the earlier conclusions.

Bioenergy (represented in the upper graph of Figure V-3 as ethanol) and hydro power are very large consumers of water. This supports the Jacobson approach, which excludes biomass on environmental grounds and includes no increase in hydro generation. Comparing the remaining resources, we find that the renewable alternatives are clearly preferable.

A final factor that must be taken into account is time. Indeed, the urgency expressed in the Paris Agreement suggests it should be the first factor. Although we have shown similar “merit order” results in the short- and long-term analyses, there is an urgent need to reduce carbon emissions and pollution as quickly as possible. All of these road maps require significant change in the technologies used to produce and consume energy, essentially a transition to intelligent energy services that includes active management and passive design to meet the much greater need for electricity required by the electrification of the industrial and transportation sectors. Given the current state of technological developments, some technologies can deliver much sooner than others in response to the urgency of the challenge.

As shown in Figure V-4, wind and solar, which will be the core technologies of the future global energy system, can deliver the needed power in large quantities more quickly. The capacity projections in Figure V-4 are adjusted for load factors, using current experience. The variable nature of wind and solar is reflected in an assumed 35% factor for wind, 25% factor for solar and 70% for CSP with thermal energy storage. Nuclear is assumed at 90% and fossil fuels at 85%. Over the course of the next decade and a half, the load factors for wind and solar are likely to go up as the technologies improve and they are combined with increasingly economic storage. Indeed, there are many deployments of these technologies that already exceed the load factor levels assumed above. This is all the more likely since, according to the economic “merit order” approach, much of the global deployment of renewable resources would be in virgin territories with rich resources. Since the Deep Decarbonization Project covers nations that emit three-quarters of global carbon, their projected resource mix, which includes nuclear and carbon capture, is scaled up in Figure V-4 to represent the decarbonization of 100% of the global electricity system.

The analysis of Deep Decarbonization without the environmental constraint ends up claiming a significant contribution from fossil fuels and nuclear. However, that contribution comes much later and results in electricity costs that are much higher. Though 2030, there is little contribution for new nuclear reactors and fossil fuels with carbon capture and storage. The Deep Decarbonization Pathways assume increasing contributions from nuclear and carbon capture in later years.

Both fossil fuel-based technologies and nuclear power, however, are much more costly and would require long research, development and deployment processes to get those costs down. Both would also have to solve significant environmental problems. The analysis of cost trends presented above suggests that an economic revolution in the traditional technologies is not likely in the near- or mid-term. The real world experience of nuclear reactor construction does not support a claim that it can be brought online quickly. Construction periods in the U.S. increased throughout the history of the industry and average a decade. Current nuclear construction is well behind schedule throughout the world. Globally, nuclear construction periods are not quite as long as the U.S., but they are far longer than other technologies. Globally and in the U.S., nuclear construction periods are six times as long as renewable construction periods. The extreme urgency of climate change means that nuclear will miss the critical period of the next decade, particularly if new nuclear technologies that are still on the drawing board are needed.

The comparison in Figure IV-4 also challenges the claim that technologies based on fossil-fuels with carbon capture or nuclear power are necessary to deal with climate change. The Greenpeace “revolution scenario” projects a level of low-carbon generation that equals the Deep Decarbonization Project projection with carbon capture but without nuclear. Both the Greenpeace “advanced scenario” and Jacobson et al. projects a level of carbon reduction that exceeds the Deep Decarbonization Projection without either fossil fuels or nuclear.

This paper demonstrates that the “economic merit order” of resource acquisition is quite close to the “environmental merit order.” Applying least-cost criteria in the context of a carbon constraint achieves the goal of pollution reduction.

• In the long-term, the economic and environmental “merit orders” are almost identical. Because the cost of the low-carbon, low-pollution technologies has plummeted and their cost is expected to continue to decline, the shift away from baseload resources (fossil fuels and nuclear power) to reliance on flexible renewable resources – linked with active management of supply and demand – will lower the cost of electricity.

• Even in the mid-term, the “economic merit order” follows the “environmental merit order” to a large extent (75%-90%, depending on costs used). Because the deviation of the “environmental merit order” is so small and the economic benefit of pursuing a 100% renewable electricity sector is so large, it does not seem worthwhile to relax the carbon or the other pollutant constraints.

• In the short-term, the main resources of the 100% renewable approach are currently less costly and widely available. Therefore, there is no reason to hesitate in pursuing the low-carbon, low-pollution path. Given that this analysis assumes the massive electrification of the whole economy, the much smaller task of decarbonizing the electricity sector to meet the “traditional” need for electricity would be quite manageable. The technologies are in hand; we “merely” need to deploy them. The constraints are in the transportation and industrial sectors, where the necessary technologies are not as far along. The economic resource savings achieved by utilizing lower cost low-carbon, low-pollution resources largely “pays for” the transformation of the other sectors. The environmental and public health benefits of the transformation are surplus savings.

The Paris Agreement

This paper concludes that the political economy chosen for responding to climate change in the Paris Agreement fits the underlying techno-economic nature of the available resources. It is also consistent with the terrain of political authority and responsibility of the Parties to the underlying United Nations Framework Convention on Climate Change. The political economy of the Agreement reflects the combination of techno-economic conditions and environmental goals.

• The progressive, mixed market economic model is driven by the need for a rapid, least-cost decarbonization that supports sustainable development of the global economy.

• It also recognizes vast differences in resource endowments and the dramatic differences in level of economic development between the Parties.

• The multi-stakeholder, commons approach to governance reflect the diversity of circumstances and the authority of nations over local energy policy.

At this moment, nuclear power demands attention as a subtheme of the analysis because its advocates claim it must be a part of the solution. Indeed, some go so far as to call for a 100% nuclear future. Because these claims are made in spite of nuclear power’s extremely high cost, abysmal and continuing record of cost overruns and construction delays, serious environmental and public health impacts, and fundamental incompatibility with renewable resources, it merits at most a footnote in the analysis, a footnote that merely explains why nuclear power should not be included as an asset in the long-term, low-carbon portfolio.

• To match the economic cost of renewables, nuclear power would need a technological revolution that has eluded it in its half century of commercial deployment.

• Such an improbable revolution is very unlikely to take place in the time frame deemed critical to the fight against climate change.

• Nuclear power is equally unlikely to overcome its other severe environmental problems.

Once the direction of a least-cost route to a decarbonized economy is set by the superiority of renewables, it becomes impossible for nuclear power to participate in the ultimate portfolio. The idea of pursuing an “all-of-the-above” scenario runs afoul of the fundamental differences between the 20th century, baseload fossil fuelapproach and 21st century, renewable energy approach. The two technologies simply do not mix very well because nuclear is not flexible. The vigorous attack on the renewables launched by advocates of nuclear power in their effort to secure favorable treatment of aging reactors is testimony to the incompatibility between the two.63 Gas has also fought renewables over market share. Much the same can be said of fossil fuels with carbon capture.

The structure of the Paris Agreement gives individual nations the authority and responsibility to develop local decarbonization strategies within the parameters endorsed by the Parties. The Parties cannot be ordered not to pursue nuclear, but the goal of rapidly developing and deploying a least-cost, economically and environmentally sustainable decarbonized electricity sector argues strongly against nuclear power. To the extent that collaborative and coordinated actions are necessary and undertaken to accomplish the goals of the Agreement, they should be devoted to promoting progress along the 100% renewable route to a decbarbonized economy. The reference to renewables in the Agreement in the context of promoting access to affordable, sustainable electricity and building local capabilities, suggest that, here too, the Agreement got it right.

“…Given the compelling scientific evidence about the existence and impacts of human-caused climate change, it seemed tragic that the United States would [pull out of the Paris climate agreement and] turn its back on the world and future generations…[Americans oppose the move] by a 2-to-1 margin…[But] there are many reasons for hope, as well as opportunities for meaningful action…[Individuals, communities, and states have a larger and more impactful role than ever to play as stewards of the earth and guardians of inter-generational equity…

Many cities, states, and individuals recognize that inaction is not an option, and are stepping up…At the individual level there has never been a better time to conserve wherever possible…[Communities] can and should adopt the 100 percent Renewable Energy Resolution…[California is showing what can be done at the state level. Despair is not] an option…For the sake of our children and grandchildren, our natural heritage, our national security, our economy, our health, and our moral responsibilities, there has never been a better time to act…” click here for more

“…[Solar panels on rooftops can save thousands a year but that] is not the only place they can be applied…Some smartphone cases come with solar panels on the back… [S]ome boats have been designed to run entirely on solar panels and accessories…[Solar-friendly devices for campers include] solar-powered tents, charging stations, cook stoves and more. There’s no more need for propane tanks…[Flashlights] store solar energy…[Portable solar panel chargers can] charge your laptop, camera or tablet…Solar panels can be installed onto a pool’s cover, insulated pool sheets can retain heat in the water, or solar tubes can] heat the water…[Fitness trackers will soon be] solar-powered…[Cities are] using photovoltaic (PV) energy to partially power trains, subways, buses, cars, planes and even roadways…Cities, commercial properties and residential areas are using outdoor solar-powered] lighting…[Space heaters and water heaters are also now] solar-powered…[And any sign that uses flashing lights or backlighting, such as school zone signs or billboards, can now be operated using solar panels…[I]ncredible uses of solar power can reduce our environmental impact one charger at a time.” click here for more

“The nation’s electricity grid operators are increasingly turning to more flexible resources and low-cost renewable energy options like wind and solar, rendering outdated the notion that ‘baseload’ generating plants are required to reliably power America’s homes and businesses…[Advancing Past “Baseload” to a Flexible Grid: How Grid Planners and Power Markets Are Better Defining System Needs to Achieve a Cost-Effective and Reliable Supply Mix found the term ‘baseload’ is outdated because today’s] grid planners increasingly value] resource flexibility to make it easier to balance supply and demand in real time…[B]aseload plants are limited in providing this flexibility because they cannot be easily turned on and off without incurring significant costs…Portfolios of different resource types [including flexible conventional power, variable renewables, distributed generation, energy efficiency, demand response, and emerging technologies like battery storage] can reliably and cost-effectively serve customers’ needs…” click here for more

TODAY’S STUDY: Proven – New Energy Is NO Threat To The Power System

It is a common occurrence for the issue of reliability to be raised when market, technology or policy changes are affecting the financial outlook of different segments of the electric industry. This phenomenon has occurred several times over the past two decades, as the prospect of new industry and market structures, technological advancement, air pollution controls and customer-driven changes stood to alter the operations and economics of various types of power plants on the electric system. Sometimes these warnings spring from genuine concerns, such as the need to address the localized reliability impacts of potential plant closures; other times they reflect a first line of defense by opponents of the changes underway in the industry.

Recently, some have raised concerns that current electric market conditions may be undermining the financial viability of certain conventional power plant technologies (like existing coal and nuclear units) and thus jeopardizing electric system reliability. In addition, some have suggested that federal and state policies supporting renewable energy are the primary cause of the decline in financial viability. The evidence does not support either hypothesis.

There is little doubt that the transition under way in the industry will lead to a power system resource mix and consumption patterns quite different from the ones to which the industry has grown accustomed in recent decades. The ongoing diversification of generation supply (See Figure 1) has lowered wholesale electricity costs in most parts of the U.S. and has contributed to recent declines in consumers’ overall cost of living.

1. Market Forces are Driving the Change in the Generation Mix, to the Benefit of Consumers

 Fundamental market forces -- the addition of highly efficient new gas-fired resources, low natural gas prices, and flat demand for electricity -- are primarily responsible for altering the profitability of many older merchant generating assets in the parts of the country with wholesale competitive markets administered by Regional Transmission Organizations (RTOs). As a result, some of these resources (mostly coal- and natural gas-fired generating units, but also many oil-fired power plants and a handful of nuclear power plants) have retired from the system or announced that they will do so at a future date.

 Other factors -- such as rapid growth in newer energy technologies (whose costs have declined significantly in recent years), and state policies and consumers’ actions that support such technologies -- also contribute to reducing the profitability of less economic assets. These are, however, a distant second to market fundamentals in causing financial pressure on merchant plants without long-term power contracts. In the PJM regional market, which accounts for a large share of the nation’s coal plant retirements, decreases in natural gas prices have had a much larger impact on the profitability of conventional generators than the growth of renewable energy, as illustrated in Figure 2.

 The retirement of aging resources is a natural element of efficient and competitive market forces, and where markets are performing well, these retirements mainly represent the efficient exit of uncompetitive assets, resulting in long-run consumer benefits.

2. The Transition Underway in the Electric Resource Mix is Not Harming Reliability

 Although some commentators have raised concerns that the declining financial viability of certain conventional power plant technologies (like coal and nuclear power plants) that operate as merchant units in several wholesale electricity markets may be jeopardizing electric system reliability, there is no evidence supporting that conclusion. In fact, a recent reliability review by the National Electric Reliability Council (NERC) -- the nation’s designated reliability organization - - shows that the changes in regional wholesale markets are not leading to lower bulk-power system reliability metrics.

 Many advanced energy technologies can and do provide reliability benefits by increasing the diversity of the system. The addition of newer, more technologically advanced and more efficient natural gas and renewable technologies is rendering the power systems in this country more, rather than less, diverse. These newer generating resources are also contributing to the varied reliability services -- such frequency and voltage management, ramping and loadfollowing capabilities, provision of contingency and replacement reserves, black start capability, and sufficient electricity output to meet demand at all times -- that electric grids require to provide electric service to consumers on an around-the-clock basis. As a result, increasing quantities of natural gas and renewable generation are increasing the diversity of the power system and supporting continued reliable operations.

A common occurrence in the electric industry is for observers to raise reliability concerns when policy changes -- combined with technology or market trends -- are affecting or may affect the financial outlook for different segments of the electric industry. This phenomenon has occurred several times over the past two decades. Such concerns about electric system reliability were voiced in the mid- 1990s, for example, when changes in efficient co-generation technologies, combined with high rates in certain states, led large industrial customers to call for retail choice and many states to begin to restructure the industry. Such concerns were raised when the Environmental Protection Agency (EPA) and the states began to implement Title IV of the Clean Air Act, which controlled sulfur dioxide emissions from power plants. More recent examples include the debates over reliability impacts in the period leading up to EPA’s adoption of the Cross-State Air Pollution Rule, the Mercury and Air Toxics Standard (MATS) and the Clean Power Plan, all of which would have affected air emissions from various fossil-fuel power plants.

The maintenance of power system reliability is a fundamental necessity for the protection of public safety, health and welfare, as well as to support the nation's economy and standard of living. Expressions of concern over power system reliability are thus common whenever there is major change underway or anticipated in the industry. Sometimes the warnings spring from genuine concerns, such as the need to address localized reliability impacts of potential plant closures; other times they reflect a first line of defense by opponents of the changes underway in the industry, or those potentially adversely affected.

There are many sound reasons why policy and/or market changes rarely, if ever, actually end up adversely affecting electric system reliability. A vast network of entities and organizations, and a robust set of reliability laws, rules, practices, and procedures, ensures this outcome. Nevertheless, these discussions play an important role in focusing the attention of the industry on taking the steps necessary to continue to ensure reliable electric service to Americans.

Over the past decade, the electric industry has witnessed significant transitions. The changes result from a combination of forces: dramatic increases in the production of domestic natural gas and the resulting decreases in the price of natural gas; displacement of coal-fired generation with output at gas-fired power plants that had previously been underutilized; flat demand for electricity; continued improvements in the efficiency, capabilities, and costs of new gas-fired generating technologies and of both grid-connected and distributed solar and wind generation; widespread and growing adoption of small-scale, decentralized generating technologies on customers’ premises; requirements that coal plants without adequate controls on mercury and other toxic pollutants adopt modern equipment; and other forces. These changes have lowered wholesale electricity costs in most parts of the U.S., and have contributed to recent declines in consumers’ overall cost of living.

These changes challenge the economics of older fossil-fuel and nuclear power plants in many parts of the country and are driving a steady transition in the nation's resource mix towards more gas-fired and renewable resources. This raises two fundamental questions that have found their way into the discourse among electric industry participants, regulators, stakeholders, and practitioners:

First, what exactly are the primary drivers of the transition underway in the industry?

Second, are the changes impacting the mix of generating resources in a way that could undermine power system reliability?

This Report attempts to answer both questions. Regarding the first question, we review the fundamental economic and policy factors that affect the profitability of various types of generating sources competing in today's electricity markets. Further, we show how various factors -- changing fuel costs, demand for electricity and various policies -- have influenced the evolving resource mix in various regions. This analysis is presented in Sections III and IV.

Next, we review the evolving resource mix through the lens of power system reliability. This section evaluates the specific contributions of various technologies -- dispatchable and non-dispatchable power plants offering slow-ramping and quick-ramping capabilities, and so forth -- to providing the essential reliability services needed to keep the lights on. We evaluate whether the overall mix of resources resulting from economic and regulatory drivers may somehow degrade power system reliability. This review is presented in Sections V and VI.

Finally, in Section VII we present our observations based on the analysis…

While the nation's mix of electric generating resources has always changed over time, it is increasingly evident that the U.S. electric power system is now going through a major transition. The current changes have been driven by several things: fundamental shifts in the prices of fuels for power generation (in particular, natural gas); improvements in traditional and renewable generating technology cost and performance; the rapid emergence of distributed resources including energy efficiency; and state and federal policies promoting the development and commercialization of advanced energy technologies.

These changes take place in the context of some important continuities: the electric industry’s successful maintenance of power system reliability. Even so, a common occurrence in the industry is for observers to raise reliability concerns whenever technology, market or policy trends or events are affecting or may affect the balance of resources on the system. Such reliability concerns have been raised regularly over decades in the face of industry changes. It is a particularly powerful tool in public discussions, because reliability simply cannot be jeopardized. Sometimes the warnings spring from genuine concerns, such as the need to address localized reliability impacts of potential plant closures; other times they reflect a first line of defense by opponents of the changes underway in the industry, or those potentially adversely affected. Yet in every case, the prospect of change has led to reliability assessments, careful evaluations of new and upcoming challenges, and steps taken to avoid reliability problems from actually coming to fruition.

There are many sound reasons why policy and/or market changes rarely if ever actually end up adversely affecting electric system reliability. A vast network of entities and organizations, combined with a complex set of reliability laws, rules, practices, and procedures, ensures this outcome. Nevertheless, these discussions play an important role in focusing the attention of the industry on taking the steps necessary to continue to ensure reliable electric service to Americans.

There is little doubt that the transition under way in the industry will lead us to a power system resource mix and consumption patterns quite different from what the industry has grown accustomed to in recent decades. The recent changes result from a combination of forces, have lowered wholesale electricity costs in most parts of the U.S., and have contributed to recent declines in consumers’ overall cost of living. Yet the nature and pace of change have raised two fundamental questions in public debates among electric industry participants, regulators, stakeholders and practitioners:

First, what exactly are the primary drivers of the transition underway in the electric industry?

Second, are the changes impacting the mix of generating resources in a way that could undermine power system reliability? In this Report we have evaluated both questions. Based on our review, we arrive at the following observations and conclusions:

 Fundamental market forces -- flat demand for electricity, low natural gas prices and the addition of highly efficient new gas-fired resources -- are primarily responsible for altering the profitability of many older, merchant generating assets in the parts of the country with wholesale competitive markets administered by RTOs. As a result, many such resources (mostly coal- and natural gas-fired generating units, but also many oil-fired power plants and a handful of nuclear power plants as well) have retired from the system or announced that they will do so at a future date.

 Other factors -- such as rapid growth in advanced energy technologies and state policies supporting such technologies -- also contribute to reducing the profitability of less economic assets, but such factors are secondary to market fundamentals in causing financial pressure on merchant plants without long-term power contracts.

 The retirement of aging resources is a natural element of efficient and competitive market forces, and where markets are performing well, these retirements mainly represent the efficient exit of uncompetitive assets, and will lead to lower electricity prices for consumers over time.

 Recently, some observers have raised concerns that the transition prompted by market and policy factors may be undermining the financial viability of certain existing generating units that use conventional power plant technologies (like coal and nuclear power plants) that provide ‘baseload’ power supply, and in so doing, may be jeopardizing electric system reliability. There is no evidence supporting that conclusion. In fact many advanced energy technologies can and do provide reliability benefits by increasing the diversity of the system and by providing important reliability services to the grid. The addition of newer, technologically advanced, and more efficient natural gas and renewable technologies is rendering the power systems in this country more, rather than less, diverse. The evolving power system is tending to increase fuel diversity, technology diversity, size diversity, and geographic diversity of power supply. NERC's own analysis suggests that the trend in reliability performance is increasing rather than decreasing in all regions. Further, newer generating resources are contributing diverse reliability services, too: frequency and voltage management, ramping and load following capabilities, provision of contingency and replacement reserves, and black start capability. Given the many attributes associated with a reliable electric system, the term "baseload resources" is an outdated term in today’s electric system which sees gas-fired resources and renewable capacity together capable of providing both around-the-clock power and the flexibility to cycle and ramp as needed to meet and sustain bulk power system reliability objectives.

 The electric system will inevitably continue to change in the future as it has in the past, as new technologies and investments come about through innovation, market forces, consumer preferences, and policy signals and directives from states and the federal government. As this occurs, it will be important to continuously evaluate the reliability implications of a power system that is transforming in truly fundamental ways. Fortunately, existing FERC, NERC, ISO/RTO, state, and utility planning and regulatory functions ensure that evaluation will occur and that reliability will be maintained.

QUICK NEWS, June 26: What Climate Change Really Means; New Energy Now Bigger Than Nuclear; The Rump Angers Iowa With Ignorant Wind Remarks

“…[Nearly 50 flights out of Phoenix were cancelled as the heat rose past the airline’s 118 degrees maximum operating temperature…It’s difficult not to connect the delays to climate change—scientists estimate the planet’s overall temperature has increased by 1.8 degrees since preindustrial times. Last year was the hottest on record, followed by 2015, followed by 2014…[Here are a few other ways scientists expect climate change to] impact day-to-day life in the U.S. within the next century…[S]ummer will take place indoors…[because it will be] unsafe to go outside for extended periods of time…Roads and train tracks will melt and buckle under the heat…Those with resources, particularly residents of first-world countries, will be spared the most serious repercussions, at least at first. But for the billions of poor people living in developing nations, global warming has already proven deadly...[Scientists urge action, even if it’s minor things like driving less, turning down your thermostat, or reducing your meat intake, because we] can’t afford to not think this is a problem…” click here for more

“…[F]or the first time since the beginning of the nuclear era - renewable energy sources (i.e., biomass, geothermal, hydropower, solar - inc. small-scale PV, wind) are now providing a greater share of the nation's electrical generation than nuclear power…For the first third of this year, renewables and nuclear power have been running neck-in-neck with renewables providing 20.20% of U.S. net electrical generation during the four-month period (January - April) compared to 20.75% for nuclear power. But in March and April, renewables surpassed nuclear power and have taken a growing lead: 21.60% (renewables) vs. 20.34% (nuclear) in March, and 22.98% (renewables) vs. 19.19% (nuclear) in April…While renewables and nuclear are each likely to continue to provide roughly one-fifth of the nation's electricity generation in the near-term, the trend line clearly favors a rapidly expanding market share by renewables. Electrical output by renewables during the first third of 2017 compared to the same period in 2016 has increased by 12.1% whereas nuclear output has dropped by 2.9%...In fact, nuclear capacity has declined over the last four years…” click here for more

“…[The president] is a little bit obsessed with the evils of wind energy, a topic that did not go over so well at his rally in Iowa…where the rapid growth of the state's wind energy industry has been a bipartisan success story…[E]nvironmentalists and politicians said the president's suggestion that wind is unreliable was outdated and off-base…Republican Sen. Chuck Grassley (Iowa), a longtime supporter of wind energy in his state, said that [the president’s] anti-wind ambitions would only be enacted ‘over my dead body’…[And the president’s ignorant remarks about wind’s threat to bald eagles were completely uninformed. Just 134,000 to 327,000 birds of any kind] die in wind turbine collisions annually compared to a minimum of 365 million that die from collisions with windows of towering buildings like urban hotels]…” click here for more

“The fight against global warming is one of humanity’s great moral movements, alongside the abolition of slavery, the defeat of apartheid, votes for women and gay rights, according to the former US vice-president and climate campaigner, Al Gore…The battle to halt climate change can be won, he said, because the green revolution delivering clean energy is both bigger than the industrial revolution and happening faster than the digital revolution…Gore has played a major global role in raising awareness of the dangers of climate change…[His] new film An Inconvenient Sequel: Truth to Power is released this summer…Gore told his London audience he was optimistic of success, despite the recent US withdrawal from the global Paris climate accord [because no] one person can stop the climate movement or the sustainability revolution…” click here for more

“Solarplaza and the Inter-American Investment Corporation (IIC) convened over 150 international investors, project developers and solar energy experts from more than 30 countries…The IIC, a member of the IDB Group, has pioneered large-scale solar PV energy financing in Latin America and the Caribbean and plans to approve $1 billion in energy deals in 2017…[Attendees explored strategies to overcome financing hurdles to] bankable solar PV projects…[and] shape the future of solar power in the region…[Since IIC started working with Chile in 2008, it has gone from less than 20 MW to 4,000 MW of non-conventional renewable energy…[The IIC has] 16 solar energy projects outstanding in the region valued at over $500 million…” click here for more

Plug-in Hybrids: The Cars that will ReCharge America by Sherry Boschert: "Smart companies plan ahead and try to be the first to adopt new technology that will give them a competitive advantage. That’s what Toyota and Honda did with hybrids, and now they’re sitting pretty. Whichever company is first to bring a good plug-in hybrid to market will not only change their fortune but change the world."

Oil On The Brain; Adventures from the Pump to the Pipeline by Lisa Margonelli: "Spills are one of the costs of oil consumption that don’t appear at the pump. [Oil consultant Dagmar Schmidt Erkin]’s data shows that 120 million gallons of oil were spilled in inland waters between 1985 and 2003. From that she calculates that between 1980 and 2003, pipelines spilled 27 gallons of oil for every billion “ton miles” of oil they transported, while barges and tankers spilled around 15 gallons and trucks spilled 37 gallons. (A ton of oil is 294 gallons. If you ship a ton of oil for one mile you have one ton mile.) Right now the United States ships about 900 billion ton miles of oil and oil products per year."

NOTEWORTHY IN THE MEDIA:
NewEnergyNews would welcome any media-saavy volunteer who would like to re-develop this section of the page. Announcements and reviews of film, television, radio and music related to energy and environmental issues are welcome.

Review of OIL IN THEIR BLOOD, The American Decades by Mark S. Friedman

OIL IN THEIR BLOOD, The American Decades, the second volume of Herman K. Trabish’s retelling of oil’s history in fiction, picks up where the first book in the series, OIL IN THEIR BLOOD, The Story of Our Addiction, left off. The new book is an engrossing, informative and entertaining tale of the Roaring 20s, World War II and the Cold War. You don’t have to know anything about the first historical fiction’s adventures set between the Civil War, when oil became a major commodity, and World War I, when it became a vital commodity, to enjoy this new chronicle of the U.S. emergence as a world superpower and a world oil power.

As the new book opens, Lefash, a minor character in the first book, witnesses the role Big Oil played in designing the post-Great War world at the Paris Peace Conference of 1919. Unjustly implicated in a murder perpetrated by Big Oil agents, LeFash takes the name Livingstone and flees to the U.S. to clear himself. Livingstone’s quest leads him through Babe Ruth’s New York City and Al Capone’s Chicago into oil boom Oklahoma. Stymied by oil and circumstance, Livingstone marries, has a son and eventually, surprisingly, resolves his grievances with the murderer and with oil.

In the new novel’s second episode the oil-and-auto-industry dynasty from the first book re-emerges in the charismatic person of Victoria Wade Bridger, “the woman everybody loved.” Victoria meets Saudi dynasty founder Ibn Saud, spies for the State Department in the Vichy embassy in Washington, D.C., and – for profound and moving personal reasons – accepts a mission into the heart of Nazi-occupied Eastern Europe. Underlying all Victoria’s travels is the struggle between the allies and axis for control of the crucial oil resources that drove World War II.

As the Cold War begins, the novel’s third episode recounts the historic 1951 moment when Britain’s MI-6 handed off its operations in Iran to the CIA, marking the end to Britain’s dark manipulations and the beginning of the same work by the CIA. But in Trabish’s telling, the covert overthrow of Mossadeq in favor of the ill-fated Shah becomes a compelling romance and a melodramatic homage to the iconic “Casablanca” of Bogart and Bergman.

Monty Livingstone, veteran of an oil field youth, European WWII combat and a star-crossed post-war Berlin affair with a Russian female soldier, comes to 1951 Iran working for a U.S. oil company. He re-encounters his lost Russian love, now a Soviet agent helping prop up Mossadeq and extend Mother Russia’s Iranian oil ambitions. The reunited lovers are caught in a web of political, religious and Cold War forces until oil and power merge to restore the Shah to his future fate. The romance ends satisfyingly, America and the Soviet Union are the only forces left on the world stage and ambiguity is resolved with the answer so many of Trabish’s characters ultimately turn to: Oil.

Commenting on a recent National Petroleum Council report calling for government subsidies of the fossil fuels industries, a distinguished scholar said, “It appears that the whole report buys these dubious arguments that the consumer of energy is somehow stupid about energy…” Trabish’s great and important accomplishment is that you cannot read his emotionally engaging and informative tall tales and remain that stupid energy consumer. With our world rushing headlong toward Peak Oil and epic climate change, the OIL IN THEIR BLOOD series is a timely service as well as a consummate literary performance.

Review of OIL IN THEIR BLOOD, The Story of Our Addiction by Mark S. Friedman

"...ours is a culture of energy illiterates." (Paul Roberts, THE END OF OIL)

OIL IN THEIR BLOOD, a superb new historical fiction by Herman K. Trabish, addresses our energy illiteracy by putting the development of our addiction into a story about real people, giving readers a chance to think about how our addiction happened. Trabish's style is fine, straightforward storytelling and he tells his stories through his characters.

The book is the answer an oil family's matriarch gives to an interviewer who asks her to pass judgment on the industry. Like history itself, it is easier to tell stories about the oil industry than to judge it. She and Trabish let readers come to their own conclusions.

She begins by telling the story of her parents in post-Civil War western Pennsylvania, when oil became big business. This part of the story is like a John Ford western and its characters are classic American melodramatic heroes, heroines and villains.

In Part II, the matriarch tells the tragic story of the second generation and reveals how she came to be part of the tales. We see oil become an international commodity, traded on Wall Street and sought from London to Baku to Mesopotamia to Borneo. A baseball subplot compares the growth of the oil business to the growth of baseball, a fascinating reflection of our current president's personal career.

There is an unforgettable image near the center of the story: International oil entrepreneurs talk on a Baku street. This is Trabish at his best, portraying good men doing bad and bad men doing good, all laying plans for wealth and power in the muddy, oily alley of a tiny ancient town in the middle of everywhere. Because Part I was about triumphant American heroes, the tragedy here is entirely unexpected, despite Trabish's repeated allusions to other stories (Casey At The Bat, Hamlet) that do not end well.

In the final section, World War I looms. Baseball takes a back seat to early auto racing and oil-fueled modernity explodes. Love struggles with lust. A cavalry troop collides with an army truck. Here, Trabish has more than tragedy in mind. His lonely, confused young protagonist moves through the horrible destruction of the Romanian oilfields only to suffer worse and worse horrors, until--unexpectedly--he finds something, something a reviewer cannot reveal. Finally, the question of oil must be settled, so the oil industry comes back into the story in a way that is beyond good and bad, beyond melodrama and tragedy.

Along the way, Trabish gives readers a greater awareness of oil and how we became addicted to it. Awareness, Paul Roberts said in THE END OF OIL, "...may be the first tentative step toward building a more sustainable energy economy. Or it may simply mean that when our energy system does begin to fail, and we begin to lose everything that energy once supplied, we won't be so surprised."

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